subject: The Ways A Scottish Trust Deed Affect Your Credit Rating [print this page] How does a Scottish Protected Trust Deed affect your credit rating: A Trust Deed is also known as a Scottish Trust Deed, is a legal agreement set up between a debtor and a creditor. It essentially binds the debtor, that has not been able to pay a debt owed to their creditors, to a licensed Insolvency Practitioner. This insolvency practitioner is called the trustee.
Only Scotland residents are eligible for a Scottish protected trust deed. Individuals must be employed and have more than over ten thousand pounds of unsecured debt. This legal agreement is constructed to assist individuals that are not able to pay their debts to work out an agreement with their creditors. This is done with the assistance of a Trustee. Once an agreement is made, monthly payments are determined.
The trustee will manage the trust deed from the repayment to the terms at which they are repaid. These agreements do not typically go over thirty-six months. A certain amount of money must be paid each month in order to remain in good standing on the agreement. The trustee and debtor will make sure the terms are realistic and can fit into the individual's budget.
It is important that the debtor not over extend themselves while repaying back the creditors. They must be forthright in all of their financial dealings so that the trustee can establish repayment terms that the debtor can afford. This is very important because once the agreement is in place, it must be followed as stipulated by the terms. There are no adjustments that are later made.
In order for an individual to qualify for a protected Trust Deed they must meet certain criteria set by the Trustee. These types of arrangements are only available in limited circumstances. A protected Trust Deed will protect the debtor from the creditor in such a way that the creditor will not be able to contact the individual that owes the debt for the duration of the repayment agreement.
When an individual enters into a Scottish Protected Trust Deed, they will have to provide a full account of all of their creditors. This list must detail exactly how much is owed. They will then have to work out what the can afford to repay to settle the debt. The deed is then placed in a publication that is only available to Solicitors.
There are many good reasons why a person may look to a Trust Deed to settle their financial debts. It is a much cleaner and less complicated process than filing for bankruptcy. The legal fees alone are a good reason to consider a Scottish Trust Deed. The debtor no longer has to communicate with their creditors, which can be a frustrating process. With a trust deed, the Trustee handles all of the creditors issues.
There are, however, some disadvantages that should be noted. All of your assets will have to be declared and the most valuable assets will be used to settle the debt owed to the creditors. And every single creditor must be listed, no stone is left unturned. This puts a lot of your assets into jeopardy of being seized to settle the unpaid debt. And becoming involved in a deed trust will negatively affect your credit rating. It will take quite a few years to repair your credit after entering in such an agreement.
There are many things to consider when answering the question, How does a Scottish Protected Trust Deed affect your credit rating? It will drastically reduce your credit worthiness. All aspects should be considered before making such an agreement.
